Commercial development—direct tax issues
Commercial development—direct tax issues

The following Tax guidance note provides comprehensive and up to date legal information covering:

  • Commercial development—direct tax issues
  • Investing or trading in property?
  • Choosing a property holding structure
  • Tax on profits of a property development trade
  • Other direct tax considerations

In the real estate sector, property development is an essential part of the activities of all those involved in the sector, whether it consists of minor refurbishment, major alterations, or new construction. Those carrying on these activities are generally subject to tax under general rules, but there are also some provisions which apply specifically to property development.

This Practice Note considers direct tax issues which arise on the development of land. These issues often arise irrespective of whether the land is intended for residential use or otherwise, but there are some specific tax rules which apply in the residential context. The indirect tax issues which arise on commercial property development transactions are considered in Practice Note: Commercial development—indirect tax issues and the tax issues which arise where land is developed for residential use are considered in Practice Notes: Residential development—direct tax considerations and Residential development—indirect tax considerations. The tax considerations involved in both commercial development and residential development are compared and contrasted in Checklist: Commercial development vs residential development (tax issues)—checklist.

The direct tax issues considered in this Practice Note are only an introduction to those which will arise on a typical development project. Each project will have its own intricacies, from the most simple residential conversion to the largest shopping centre development. The issues considered below are also generally covered in more